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Google Adwords Guide

Google AdWords is the biggest pay-per-click platform in the world. It made Google’s founders billionaires. It has also made significant money for those who use it — or at least, those who have used it properly. This multi-part guide can help you make the most of AdWords.

AdWords, just like SEO, is a way to buy traffic, but with AdWords you pay directly to Google, while with SEO you spend money with a search engine optimization company. If you choose to use AdWords this guide is for you.

Why should you use Google AdWords over all other pay per click platforms?

AdWords is extremely easy to set up. You can have your campaign up and running in 5 – 10 minutes.

The majority of people use Google, but most importantly, tech savvy people who are comfortable with buying online prefer Google over all other search engines.

Google rewards good advertisements with less cost per click and good positions on search results. An ad with a high click-through rate (CTR) always gets benefits from Google. The search engine wants to show the most relevant ads to users.

Google lets you target customers by their geographic locations such as zip codes, countries, cities or custom areas on the map. This ensures that you only get customers who can do business in your area of operation.

Many search marketing professionals will tell you that Google AdWords is the only PPC platform worth putting money into, since it reaches the highest number of users and delivers the highest conversion rate.

Pay Per Click Terms

You have to know basic pay-per-click terms to understand the jargon.

CPC – Cost Per Click. This is money you pay each time someone clicks on your ad. Costs per click are driven by bids.

CTR – Click Through Rate. This is the relationship between the number of impressions and clicks on the ads. For example, if Google showed an ad 100 times, and 20 people clicked on it, then the Click Through Rate (CTR) is 20%. High click through rates are rewarded by Google with high Quality Scores.

Quality Score – This is an internal algorithm that assigns value to advertisements. Ads with high quality scores can hold higher positions while paying less than the competition.

CPM – Cost per 1000 impression of an ad. This measurement is mostly used for banner ads.

ROI – Return on Investment. If you invested $1000 and got back $3000, then your ROI is 200%.

CR – Conversion Rate. This is the percentage of visitors who become customers. For example, if 100 people clicked on the ad and four became customers, then your conversion rate is 5%. Average Internet conversion rates are 2%- 3% and 7% is considered quite a high number.

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In this section we’ll cover the basics and help you set up an AdWords account. Pay attention, since you have to learn to walk before you can run.

Let’s imagine you’re selling digital cameras. This is a very competitive market. First, start out with market research for the product. You’ll need to know a few things before you start:

Google shows 30,400,000 searches per month for “digital camera.” As you can see, this word is very competitive. Come up with a few more keywords to target. Please note that your lists should be at least several hundred in size, targeting broad and exact terms. So this is a rather bad example to help you get started with Google AdWords:

nikon digital camera

canon digital camera

small digital camera

cheap digital camera

digital camera deals

buy digital cameras

Having found the keywords, we need to estimate prices for those keywords. To estimate keyword pricing use Google’s Traffic Estimator Tool. Take your main keywords and put them into the tool (its OK to put them all in at once). Google will give approximate prices for the keywords in the first three spots (select a country that you want to target).

Google gave $1.37 – $1.93 as the average pricing for the keywords, which is pretty good.

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Setting up the account is a breeze. Get to the AdWords home page and click on the “Start Now” button. Google will ask you to select between “Starter Edition” and “Standard Edition.” Select “Standard Edition” and click on “Continue.” (The Starter Edition is for people who are very new to Internet marketing).

Google will ask you if you have a Gmail account, and will offer the option to use that account with AdWords or create a new one. It’s best to create a new one for security purposes (sometimes you may log into Gmail and forget to sign out).

After you’re through, Google will ask you to select the currency. Pick US dollars, since the majority if bidders use US dollars and it’s easier to follow the buzz knowing you’re on the same page as most users. Google will send you an email with a confirmation link. Open up the email and click on the link to confirm the address.

Once confirmed, click “Start Campaign.” Select “English” and change the targeting preference if necessary (you can drill down by country, province, city, zip code or custom area on the map). Click “continue” and AdWords will ask you to create an advertisement.

Exact Match – Enclosed in brackets [], the ad will show only when the search string matches your keywords. For example, if your keyword is "harry potter," the ad will show when a searcher puts “harry potter” into the search box, but not if he or she enters “harry potter book,” even though the first two words of the search match the targeted keyword.

Broad Match – This is the default and usually least effective option. When you target “harry potter,” the ad will show up for searches such as "harry" and "potter" separately, as well as in the mix with other keywords, for example “harry and the stone” or “Potter and Hermione.”

Phrase Match – The ad will show up for exact match keywords ("harry potter" in this example) and for keywords which contain the targeted phrase along with other keywords, i.e. “harry potter movie” or “harry potter movie review.”

Once you select the keywords, it’s time to set the bid prices.

First set the maximum daily budget. This is the maximum amount you are willing to spend per day.

Then set the maximum bid price. You can set one for each keyword or for an entire ad group.

Click on "next" and you will be asked to review your account. Enter billing information and begin the campaign.

You’ll be taken to the AdWords management platform, where you can tweak settings, set new keywords and do a lot more.

Campaigns – A campaign consists of one or more ad groups. There may be more than one ad group in the campaign, but they cannot exceed the daily campaign limit. Each website generally has a separate campaign, while keywords are managed in the ad groups.

Ad Groups – An ad group has one or more ads which target a set of keywords. Ideally each ad group in the campaign targets its own subtopic. If the subtopic is not profitable, you can easily tweak it or put your money somewhere else. Keep ad groups razor sharp and clean for easy management and tracking.

{mospagebreak title=More Advanced AdWords Topics}

There are three main pay-per-click aspects you need to understand – popularity, competition and price.

Popularity – How popular is the topic you’re in? How many people know about it and actively search for it? Popular topics will give you many clicks and more chances to convert prospects into customers. Higher popularity means higher profits margins.

The negative aspect of popular topics, of course, is that they are quite competitive. This usually means high bid prices.

Lower popularity topics can also bring profits, so don’t ignore lesser known topics because there’s less potential search volume in comparison to popular ones.

Competition – Competition means there’s money in the industry. If the topic has low competition, you have to ask why. Is it because the market is unprofitable or undiscovered?

If it’s undiscovered, you’ve just found your little gold mine. Hurry, because it won’t be long before the vultures arrive.

Price – Price refers to the price of the products you’re selling. If prices are high, then you can afford high bids with low conversion rates (cars, homes, boats, etc).

If product prices are low and profit margins are low (electronics), on the other hand, you have to find a balance. Don’t go overboard with bidding because there’s a chance you won’t cover the costs. Keyword research becomes an essential piece of your campaign for items with low profit margins.

In the next article we’ll go into more strategies such as advanced keyword research, keyword bidding strategy, writing the ads, ad elements, click through rate (CTR), landing pages and more.